The Interrelation between Brand Value and CRM
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1 Hospitality solutions & services Information and Communication Networks The Interrelation between Brand Value and CRM Michael Hartmann, SVP Corporate Sales Hospitality ITB, 10th of March, 2006
2 Global Brands Study Why Consumers Pick Global Brands: Source: Harvard Business Review Generic Market Specific Challenges 36% Brand preference explained in % Others e.g. Innovation Social Responsibility 8% Global Myth 12% Quality 44% Original comments from 3,300 consumers in 41 countries Findings of the Study: Global brands offer more quality and better guarantees than other products! Global brands are expensive, but the price is reasonable when you think of the quality! On average 51% rely on the global success of a company as a signal of quality & innovation! Globalness is a strong quality signal but companies do well to manage their national identities!ambivalence of consumers within fitting brands Mar page 2
3 Guest Satisfaction and Loyalty Generic Market Specific Challenges Zagat Study Top Int. Hotels, Resorts & Spas Study: 10 travel specialists Cornell University Study Aug 2004 Case Study Harrah s Entertainment U.S. Hotel & Casino operator *positive actions: fast & friendly service Main Message " Primary driver for guest satisfaction is service quality (65%), which consists of fast & friendly service " U.S. corporations routinely lose 50% their customers over a span of 5 years resulting in 25-50% reduction in corporate performance " Innovative hotel rooms, amenities and employees positive actions* are primary drivers of guests loyalty " A 14% gain in revenues due to customer loyalty " Database records customer activity at various points of sale " Primary drivers of customer satisfaction are quick service, and friendly & helpful attention " Employee rewards linked to customer satisfaction have increased guests loyalty Mar page 3
4 Guest Satisfaction Index Generic Hotel Guest Satisfaction Index 2004, J.D.Power and Associates, 29,424 guest interviews Guest satisfaction bases on hotel services, guest room, check-in/out, costs & fees, hotel facilities and F&B #1 Four Seasons Luxury Upscale 836 #1 Westin 793 Market Specific #2 Ritz-Carlton #3 InterContinental #4 Hyatt #5 Marriott #4 Fairmont 784 #7 Hilton 758 Challenges #1 Hilton Garden Inn #2 Courtyard #5 Four Points #6 Holiday Inn Mid-Scale US domestic #1 Microtel Inns #2 Best Inns #3 Red Roof Inns #4 Budget Host Economy Mar page 4
5 Operating Costs PKF Consulting, U.S. Hotel Profit Loss Report (analysis of 4,000 financial statements) Generic " 1.8% decline in hotel s revenues and 2.1% increase in operating expenses lead to 12.4% shrinkage in profits Market Specific Intelligent management tasks & monitoring required Guest Services Costs Challenges " Labor and related costs represent 45.3% of all operating expenses " Salaries & wages went up 1.8% plus a 7.1% increase in employee benefits Productivity Control Incentive Monitoring Mar page 5
6 Siemens Hospitality Solution Which Measures Matter The Shareholder Value Umbrella Harvard Business School Study of the Service Industry Back Office Solution: Hospitality Service Center Generic Selection & Staffing Education Work experience Skill based routing Market Specific Employee Satisfaction Employee Added Value Supervision Support Empowerment Accountability Productivity control Incentive Monitoring Challenges Customer Satisfaction Quality Fast & friendly Service tracking Customer Buying Behavior Retention Referral Sustained Profitability Over time Better than competition $ Shareholder Value Growth Earnings KPI s status control -Managment Information System -Executive Information System Growth Earnings Mar page 6
7 Hotel Survey, Lausanne EHLITE, 2004/05 KPIs usefulness (Scale 1-7) by Hotel Size Employee Satisfaction Index Employee Remuneration/Incentive Index 7.00 Revenue per available Room (RevPar) Guest Contribution to GOP Average Room Rate (ADR) Guest Lifetime Value 6.00 Gross Operation Profit (GOP) Brand Value 5.00 Average Occupancy Increase Employee Headcount to Revenue 4.00 Employee productivity by Departments Brand Loyalty Index Price-Value Rate Guest Satisfaction by Hotel, Region, Brand and Chain Service Response Time GoPar Guest Repeat Business Index Guest First Time Business Index Guest Relation Value Market Share Guest Profitability Index Average Spend per Night Employee to room Ratio <250 >250 Corporate Service Quality Rate (Service success ratio) Image Index Guest Loyalty Index (Retention Rate) Staff Turnover Guest Recommendation Index Fair Market Share Mar page 7
8 We identyfied three layers to be interlinked Guest Room - Guest Entertainment - Room Control and Guest Services via TV, PDA, application module (Smart Room Concept) Set Top Box Plasma-TV PDA IP-Phone - Hotel Service Center - Service Tracking (closed service loop) Hotel Back-Office PDA WL2 phone -MIS, EIS HHSC Client App. Module Service Staff - Hosting - Centralized Applications - Content Systems - ASP models HHSC Server Content Data Center / NOC IP-PBX HiPath 4000 SURPASS HE Hosted Applications Mar page 8
9 Siemens Hospitality Solution Which Measures Matter The Shareholder Value Umbrella Harvard Business School Study of the Service Industry Back Office Solution: Hospitality Service Center Generic Selection & Staffing Education Work experience Skill based routing Market Specific Challenges Employee Satisfaction Employee Added Value Customer Satisfaction Supervision Support Empowerment Accountability Quality Fast & friendly Productivity control Incentive Monitoring Service tracking I-Smart Room Customer Buying Behavior Retention Referral Sustained Profitability Over time Better than competition $ Shareholder Value Growth Earnings KPI s status control -Managment Information System -Executive Information System Growth Earnings Mar page 9
10 Guest friendly High Tech (example I-Smart Room ) Guests would like to have at least the same level of electronic entertainment as at home Guests are not willing to read owner manuals In the luxury segment guests expect high-end electronic equipment for room control & entertainment, which are not yet available in the consumer market Guests expect to get individually recognized also within electronic media Guests expect total transparency of personalized data Mar page 10
11 Overview of Hospitality Scenarios Four Examples Personalized Guest Messaging Push Services We confirm the following "Platinum Services": Limousine service organized for 6 p.m., VIP Entrance Champagner "at your service Spa-Reservervation : Shiatsu, 3 p.m, level 2, room 4 Privacy Control Guest Folio of Mr. John Miller: Address: Membership Status: Platinum Member since 1st of January 05 Loyalty Points: Room Nights 05 total: 247 Individual Guest Profile Preferences: Top VIP treatment (incl. Complementary limousineservice) Complemtary communication services (HSIA) Guest Profile I-Drive principle adapted for navigation F&B: Jack Daniels (V.S.O.P) Green asperagus The Ambience Room Mar page 11
12 HiPath Hospitality Service Center Workflow One-touch Service Phone (Prototype) PC Phone Guest Survey Advertising Messaging HiPath Hospitality Service Center Open Interface MIS Mobile Phone Phone DECT, IP PC Guest Profile Service tracking/loop Media Console MIS/EIS PDA Tablet PC Key Performance Indicators, e.g Guest Satisfaction Index Remuneration/Incentive monitoring Life time value, Attrition Risk Index Hospitality Resource Planning HQ Level (Shared Services) Open Interface Balanced Scorecard EIS based on Key Perfomance Indicators Geography related Data Aggregation Scorecard Mar page 12
13 SURPASS Hotel Entertainment Platform How it works - overview transaction records to billing systems access network topology usage statistics (demographics) Home Network Myrio TotalManage Middleware ADSL Modem video control Media decoder Myrio Thick Client Verimatrix Client SIP Client VoIP Gateway SURPASS hiq 40 Bandwidth Resources Controller nable system splitter Access Network IP Network ncube VoD Server voice data STB Speedstream 8701 encoded video content Verimatrix CAS/DRM TDC Tandberg Device Controller Tandberg TV-Broadcast Head End TV channels Mar page 13
14 Contact and more information Mar page 14
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